Medicare's Policy Not To Pay For Treating Hospital-Acquired Conditions: The Impact

In 2008 Medicare stopped reimbursing hospitals for treating eight avoidable hospital-acquired conditions. Using 2006 California data, we modeled the financial impact of this policy on six such conditions. Hospital-acquired conditions were present in 0.11 percent of acute inpatient Medicare discharges; only 3 percent of these were affected by the policy. Payment reductions were negligible (0.001 percent, or $0.1 million-equivalent to $1.1 million nationwide) and are unlikely to encourage providers to improve quality. Options to strengthen the incentives include further payment modifications for hospital-acquired conditions or expanding the hospital-acquired condition policy to exclude payment for consequences, additional procedures, and readmissions. [Health Aff (Millwood). 2009; 28(5):1485-93; 10.1377/hlthaff.28.5.1485]